Third Quarter Net Revenue of $41.2 Million, up 11 Percent Sequentially and up 25 Percent Year-Over-Year Third Quarter GAAP EPS of ($0.01) vs. ($0.08) in the Prior Year Third Quarter Non-GAAP EPS of $0.11 vs. $0.06 in the Prior Year IRVINE, Calif., April 29, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ:LTRX), a global provider of compute and connectivity IoT solutions, today reported results for its third quarter of fiscal 2024. Net revenue totaled $41.2 million, up 11 percent sequentially and up 25 percent year-over-year. GAAP EPS of ($0.01), compared to ($0.08) in the prior year and ($0.07) in the prior quarter. Non-GAAP EPS of $0.11, compared to $0.06 in the prior year and $0.08 in the prior quarter. Business Outlook For the fourth fiscal quarter of 2024, the company expects revenue in a range of $46.5 million to $51.5 million and non-GAAP EPS of $0.12 to $0.18 per share. Conference Call and Webcast Management will host an investor conference call and audio webcast on Monday, April 29, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) to discuss its results for the third quarter of fiscal 2024 that ended March 31, 2024. To access the live conference call, investors should dial 1-844-802-2442 (U.S.) or 1-412-317-5135 (international) and indicate that they are participating in the Lantronix Q3 FY 2024 call. The webcast will be available simultaneously via the investor relations section of the company's website. Investors can access a replay of the conference call starting at approximately 7:00 p.m. Pacific Time on April 29, 2024, at the Lantronix website. A telephonic replay will also be available through May 6, 2024, by dialing 1-877-344-7529 (U.S.) or 1-412-317-0088 (international) or Canada toll-free at 1-855-669-9658 and entering passcode 1167329. About Lantronix Lantronix Inc. is a global provider of compute and connectivity IoT solutions that target high-growth industries, including Smart Cities, Automotive and Enterprise. Lantronix's products and services empower companies to achieve success in the growing IoT markets by delivering customizable solutions that address each layer of the IoT Stack. Lantronix's leading-edge solutions include Intelligent Substations infrastructure, Infotainment systems and Video Surveillance, supplemented with advanced Out-of-Band Management (OOB) for Cloud and Edge Computing. For more information, visit the Lantronix website. Discussion of Non-GAAP Financial Measures Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company's financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Non-GAAP net income consists of net loss excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), (vi) restructuring, severance and related charges, (vii) acquisition related costs, (viii) impairment of long-lived assets, (ix) amortization of purchased intangibles, (x) amortization of manufacturing profit in acquired inventory, (xi) fair value remeasurement of earnout consideration, and (xii) loss on extinguishment of debt. Non-GAAP EPS is calculated by dividing non-GAAP net loss by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP EPS, the calculation of GAAP weighted-average shares outstanding (diluted) is adjusted to exclude share-based compensation, which for GAAP purposes is treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method. Guidance on earnings per share growth is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Lantronix's ability to estimate the excluded items are not accessible or estimable on a forward-looking basis without unreasonable effort. Forward-Looking Statements This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for the fourth fiscal quarter of 2024. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. Other factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers' and vendors' supply chains due to the COVID-19 pandemic or other outbreaks, wars and recent conflicts in Europe, Asia and the Middle East, hostilities in the Red Sea, or other causes; our ability to successfully convert our backlog and current demand; our ability to successfully implement our acquisitions strategy or integrate acquired companies; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention or other related costs or difficulties; our ability to continue to generate revenue from products sold into mature markets; our ability to develop, market, and sell new products; our ability to succeed with our new software offerings; fluctuations in our revenue due to the project-based timing of orders from certain customers; unpredictable timing of our revenues due to the lengthy sales cycle for our products and services and potential delays in customer completion of projects; our ability to accurately forecast future demand for our products; delays in qualifying revisions of existing products; constraints or delays in the supply of, or quality control issues with, certain materials or components; difficulties associated with the delivery, quality or cost of our products from our contract manufacturers or suppliers; risks related to the outsourcing of manufacturing and international operations; difficulties associated with our distributors or resellers; intense competition in our industry and resultant downward price pressure; rises in inventory levels and inventory obsolescence; undetected software or hardware errors or defects in our products; cybersecurity risks; our ability to obtain appropriate industry certifications or approvals from governmental regulatory bodies; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to protect patents and other proprietary rights and avoid infringement of others' proprietary technology rights; issues relating to the stability of our financial and banking institutions and relationships; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; the impact of rising interest rates; our ability to attract and retain qualified management; and any additional factors included in our Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the Securities and Exchange Commission (the "SEC") on Sept. 12, 2023, including in the section entitled "Risk Factors" in Item 1A of Part I of that report; in our Quarterly Report on Form 10-Q for the fiscal quarter ended Dec. 31, 2023, filed with the SEC on Feb. 8, 2024, including in the section entitled "Risk Factors" in Item 1A of Part II of such report; and in our other public filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections. © 2024 Lantronix Inc. All rights reserved. Lantronix is a registered trademark. Lantronix Investor Relations Contact:        Jeremy WhitakerChief Financial     LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands)           March 31,   June 30,     2024       2023   Assets       Current assets:       Cash and cash equivalents $ 24,642     $ 13,452   Accounts receivable, net   28,542       27,682   Inventories, net   40,552       49,736   Contract manufacturers' receivables   1,562       3,019   Prepaid expenses and other current assets   2,586       2,662   Total current assets   97,884       96,551   Property and equipment, net   4,409       4,629   Goodwill   27,824       27,824   Intangible assets, net   6,561       10,565   Lease right-of-use assets   10,128       11,583   Other assets   586       472   Total assets $ 147,392     $ 151,624           Liabilities and stockholders' equity       Current liabilities:       Accounts payable $ 13,845     $ 12,401   Accrued payroll and related expenses   4,539       2,431   Current portion of long-term debt, net   3,002       2,743   Other current liabilities   22,188       28,813   Total current liabilities   43,574       46,388   Long-term debt, net   13,970       16,221   Other non-current liabilities   11,763       11,459   Total liabilities   69,307       74,068           Commitments and contingencies               Stockholders' equity:       Common stock   4       4   Additional paid-in capital   301,117       295,686   Accumulated deficit   (223,407 )     (218,505 ) Accumulated other comprehensive income   371       371   Total stockholders' equity   78,085       77,556   Total liabilities and stockholders' equity $ 147,392     $ 151,624           LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)                                           Three Months Ended   Nine Months Ended   March 31,   December 31,   March 31,   March 31,     2024       2023       2023       2024       2023   Net revenue $ 41,183     $ 37,038     $ 32,964     $ 111,252     $ 96,265   Cost of revenue   24,679       22,007       18,328       65,620       53,799   Gross profit   16,504       15,031       14,636       45,632       42,466   Operating expenses:                   Selling, general and administrative   9,753       10,224       9,946       29,147       28,916   Research and development   5,186       4,725       5,067       15,017       14,677   Restructuring, severance and related charges   350       530       490       900       664   Acquisition-related costs   -